HowGood raises $4.2 million to guide shoppers to products that match their values

Millennial consumers care about the sustainability of what they buy more than any other generation that came before them. This point is illustrated in studies from Pew Research,Clemson University and Nielsen, to name a few. Now, a New York-based consumer data company called HowGood has raised $4.2 million in a Series A round of venture funding to help retailers answer every question these discerning customers may have.

HowGood provides ratings on food, personal care items and other household products. The company assesses products for environmental, health and trade impacts. Its ratings appear on signage in stores, and on HowGood’s website and mobile apps. The mobile app allows shoppers to scan the barcode of a given item to obtain its rating.

So far, HowGood has analyzed 200,000 products, mostly food and beverages. It amasses and crunches data from its own proprietary sources, and from a huge range of open government and third-party firms to derive a complete score for different products. Its analysis encompasses everything from ingredient sourcing to chemicals and processing, packaging, shipping and labor practices.

A HowGood user scans the barcode on a yogurt to learn its sustainability rating.

Customers license HowGood’s data and can display scores in their stores if they choose. Some groceries license the data and use it privately to assess their merchandise and make decisions about what they will and won’t continue to stock. Brands may also license the data to see how they stack up against the industry overall from a sustainability perspective.

Alexander Gillett, CEO and co-founder of HowGood, said while only 5 percent of products can attain the top score, many have improved over the years since the company first started as a bootstrapped small business in 2007, an indication that sustainability is actually driving sales for consumer brands. “White label brands often do well, which may surprise consumers,” he added. “It’s no longer true that the more sustainable choice will be prohibitively expensive for someone with a constrained budget.”

Rick Heitzmann, founder and managing director of FirstMark Capital, said his firm backed HowGood because ratings are driving a huge lift in sales for certain brands and groceries, while making consumers happier about their choices. He doesn’t expect the trend to wane.

Searching for eco-friendly foods on the HowGood ratings app.

“Consumers have a blindness to different issues. Au naturel, healthy, fat-free… They see all these confusing labels and say ‘screw it, I’m just buying the cheapest thing.’ But if you say hey, this is the best thing for you to buy based on qualities you care about, then they will buy it and be happier with what they bought,” the investor said.

Besides guiding consumers, he said, HowGood gives brands and groceries a far clearer understanding of how sustainable their products really are, compared to the industry, and how that correlates to sales.

HowGood CEO Gillett said the company plans to use its new funding to cover an even wider range of products, and work with a greater number of retailers and grocers. Cosmetics and grooming ratings are under way. While he did not yet have permission to name the companies that plan to use its ratings, he said HowGood struck an agreement with at least one major beauty retailer already.

Some of the funding will also go to technical research and development. HowGood is always looking for new ways to deliver its data to shoppers, whether through wearables and health apps, or new in-store displays and voice-enabled platforms like Google Home or the Amazon Echo.